During every secular bear market there are cyclical bull markets. Dont let this confuse you. It is very simple. Read on.

First lets understand what a secular bear market is. As far back as you want to go in the history of the U.S. stock market there have been cycles of up and down. No one will deny that. See how easy this is. These long term cycles average out to about 16 years. Sixteen years (about) of the stocks going up followed by 16 years of stocks going down.

Did you happen to notice the long pull up from 1982 to 2000? Just about everything went up and every investor thought he was a genius. Even your broker and financial planner looked smart. Then ca me 2000. Ugh!

Why did the NASDAQ drop 78% and the Dow plummet 40%? In hinds ight everyone has an answer. My question is if brokers and analysts are so brilliant why didnt they tell you to sell at the top instead of continuing to advise buying all the way down? The professionals sold and went short while the little guy sat there with his portfolio in his hand agonizing all the way down.

It is an unfortunate truth that brokers and financial planners are taught their trade by Wall Street brokerage house. Please remember they are not there to help you get rich. They are there to get rich off you.

Back to the cycles. Is there any indicator that can alert an investor to a major trend and especially a major trend change? The market seems so volatile with its daily ups and downs that it is almost impossible to buy an equity that will make money for you. Many investors are told the half story that they should buy and hold and not worry about the current price. That is obviously a half truth because when we look at history we see that half the time the market is going down and that is NOT when you want be holding equities.

There is a very simple method of determining major market direct. Forget the daily buys and sells. Forget the weekly buys and sells. Forget the monthly buys and sells. Step further back and look at the entire year. You want to see what has happened and what is happening for the past 200 trading days.

Go to almost any stock web site and enter the symbol one of the major indexes the Dow Jones Industrial Average, the Standard & Poors 500 or the NASDAQ 100. On that web site you will be able to enter a 200-day moving average. When that line has turned up or is ascending the stock market is going up. If that 200-day line has turned down that is the top of the market and almost all equities should be sold.

Then WAIT. Do not buy anything. Keep you money in a money market account or a CD at the bank. When the line turns positive BUY.

If you will do that now you will know where your money should be.

Al Thomas

Albert W. Thomas has spent most of his life in the field of finance. In 1965 he founded an insurance holding company, Security Dynamics Investment Corporation, after having been an agent and General Agent for several life insurance companies. In 1970 he became cofounder and president of Real Life Estate, Inc., that marketed a unique real estate and life insurance package.

After he became interested in commodities he bought a seat for his personal trading on the Chicago Open Board of Trade, which is now known as the MidAmerica Commodity Exchange. Later he became a full time trader and also acted as a commodity broker for a few select clients. By fellow floor traders Al is considered to be an excellent technical analyst much of which is outlined in his book IF IT DOESN'T GO UP, DON'T BUY IT! It became a best seller on Amazon.

In 1981 he sold his membership on the Exchange and with his wife, Carolyn, lived full time aboard their 41' ketch, the Aumakua (which means guardian angel in Hawaiian). They sailed in Florida and the Bahamas for two years.

He founded World Trading Group in 1984 that grew to the seventh largest introducing commodity brokerage firm in the U.S. with 35 offices from coast to coast, Alaska and Canada. It was sold in 1992.

Al is a graduate of Northwestern University with a B.S. degree in Commerce and is a member of MENSA. He is now president of Williamsburg Investment Company that syndicates his weekly financial column since 1999 to more than 300 newspapers and writes a financial market letter called Over My Shoulder that is quoted in Barron?s and many other publications. A 3-month trial subscription is available on his web site. He is a regular guest on several financial radio talk shows.

His favorite pastime is fishing.

Mr. Thomas is available for speaking engagements. Please call 321-453-5300 for more information.